Inheritance tax and estate planning is an important tool to ensure that wealth is preserved for future generations.

The nature of the planning undertaken will depend on the type and value of assets in the estate as well as the overall objectives such as who is to benefit from the assets, degree of control and distribution of income.

Example of inhertance tax and estate planning opportunities include:-

Business Property Relief up to 100% relief for the value of qualifying business interests, shareholders and assets.

Agricultural Property Relief up to 100%relief for the value of qualifying land/property used for agricultural purposes.

Woodlands Relief up to 100% relief against the value of timer on the land, although a charge may subsequently arise if the timer is later sold.

Gifts to Charity.

Making full use of allowances such as the annual allowance and gifts on marriage.

Regular gifts out of income.

Outright gifts to individual/trusts.

Trusts for vulnerable persons.

Non-UK Domicile Tax Planning.

Non-UK domicile persons are usually only subject to inheritance tax on their UK situs assets, however where a person has been resident in the UK for 17 out of the last 20 tax years they are automatically deemed to be domiciled in the UK, potentially bringing their worldwide assets within the scope of UK inheritance tax.

However, where a person sets up an offshore trust to hold overseas assets whilst non-UK domiciled/deemed domiciled, the trust will be treated as excluded property and should remain outside the UK inheritance tax net.

In certain cases, it may be possible to restructure the ownership of assets to allow assets that would otherwise be treated as UK situs to qualify as excluded property. Although care will need to be taken, particularly where the recent changes to the stamp duty land tax rules are in point.

Inheritance tax and estate planning is a complex area and advice should be sought before any planning is undertaken.

Anti-Avoidance & Other Considerations.

Where inheritance tax planning is to be utilised care should be taken to ensure that the planning does not fall foul of anti-avoidance legislation such as gifts with reservation of benefit, asociated operations, pre owned asset tax etc. It will also be necessary to consider the potential impact of the proposed planning on other taxes such as capital gains tax, VAT, SDLT and relevant anti-avoidance rules such as the settlement provisions and transfer of assets abroad.

A further key consideration will be the commercial and practical aspects of the planning - in our experience bespoke advice that is tailored to the individuals precise circumstances is more likley to acjieve the desired result than one size fits all schemes.